Question # 1

Suppose that the domestic government allows a specific number of goods to be imported each year but it does not spicily from where the product is shipped or who is permitted to import such a trade barrier is known as

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an import tariff

A tariff rate quota

A selective quota

A global quota

The Schumpeterian growth model is based upon

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Inveslors

Capital formation

entrepreneurs

all of these

Application of Modern technology to increase the yield is due to

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Subsistence farming

Mechanization

Green revolution

None of these

GDP per head may be an imperfect measure of economic welfare because it excludes.

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The value of leisure

Externalities

Untraded goods

All of the above

In the long run, an increase in productivity would cause output to _________ and the aggregate price level to

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fall ; rise

fall ; fall

rise ; fall

rise ; rise

If the original money supply is MSo and the original demand for money is MDo then

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The equilibrium interest rate and savings are 5% and 50

The money supply is 200 and equilibrium income is 500

The equilibrium interest rate and income are 5% and 600

The speculative demand is 25

Skills that cna be transferred to other employers are called.

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General skills

Specific skills

Non pecuniary skills

All of the above

Which provides the best explanation of the failure of many poor countries to experience economic growth as rapid as the rich countries..

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Classical growth theory

Neoclassical growth theory

New growth theory

Market failure

An increase in the wage rate.

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Will usually lead to more people employed

Will decrease total earnings if the demand for labour is wage elastic

Is illegal in a free market

Will cause a shift in the demand for labour

In market economics the incentive that draws entrepreneurs into industry is.

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Government bonuses for meeting production quotas

Profit

Government assumption of the risk of failure

Government assistance with making output and pricing decisions

When a person received an increase in wealth, what is likely to happen to consumption and saving.

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Consumption increase and saving increases.

Consumption increases and saving decreases

Consumption decreases and saving increases

Consumption decreases and saving decreases

The fact that the Production function relating output to capital becomes flatter as we move from left to right means that.

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The marginal product of labor is positive

The marginal product of capital is positive

There is diminishing marginal productivity of labor

There is diminishing marginal productivity of capital

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

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Panel b

Panel c

Panel a

Panel d

The Keynesian model is a good guide to ______ behavior and the classical model describes behavior in.

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^{Long run, short run}

Flexible, imperfect markets

Short term , long run

Ong run, imperfect market.

The best measure of economic developments is.

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GNP

HDI

PQLI

None of these

The long run aggregate supply curve.

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Is vertical

Slopes upward

Is horizontal

Slopes downward

Starting from a balanced budget, for a given tax rate an increase in income will cause the government budget to.

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Move into surplus

Move into deficit

Remain unchanged

None of these

The growth rate of economics tend to converge because._________ is easier when capital per worker is low and because of_____

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capital widening, technical innovation

Capital widening, catch up in technology

Capital deepening, technical innovation

Capital deepening, catch up technology.

Data is collected with reasonable standard of.

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Numerical method

Feasibility

Accuracy

All of the above

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

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Revenue from value added tax

Level of company profits

Level of unemployment

Average level of wages

i- statistical laws are not exact

ii- statistics reveals the entire story

choose the correct from the following.

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Both the statements are correct

Only the first statement is correct

Only the second statement is correct

Both the statements are wrong.

In balance of payments accounting tourism and travel are classified in the

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Merchandise trade account

Services account

Unilateral transfers account

Capital account

A decline in the value of the rupee makes Pakistan goods cheaper relative to foreign goods, resulting in a _________ in net exports and a ________shifts of the IS curve.

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fall ; leftward

rise ; leftward

fall ; rightward

rise ; rightward

If a monopolist's demand curve is downward sloping and linear, then its total revenue curve must be.

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Identical to the demand curve

A ray from the origin with a slope equal to price

negative sloped with twice the slope of the demand curve

A rising function of output that increases at a decreasing rate , reaches a maximum, then falls.

Why is the law of diminishing marginal returns true.

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specialization and division of labor

Spreading the average fixed cost

Limited capital

All factors being variable in the long run

The price elasticity of demand measures

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The responsiveness of quantity demanded to a change in prie.

How far a demand curve shifts

A change in price

A change in quantity demanded

In cartels.

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Firms complete against each other

Price wars are common

Firms use price to win market share from competitors

Firms collude

What is embodies sampling.

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Haphazard selection

Numbers

Definite rules

Accuracy

The equilibrium inflation rate is determine by the intersection of __________ and ___

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demand, supply

IS , LM

AD, AS

Labour demand, labour supply

If the autarky price of S were lower in country A than in country B, then if trade were allowed.

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A would likely exports s to B

A would likely import s from B

Neither country would want to trade

None of the above

Quotas are government imposed limits on the ___ of goods trade between countries.

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Prices

Quantity

Revenue

Costs

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